Uber vs Waymo: what you need to know about the legal showdown

Another week, another raft of legal filings that thicken the plot, reveal salacious details, and perhaps point to the conclusion of an epic Silicon Valley legal battle. It's been five months since Google driverless car spinoff Waymo filed its bombshell lawsuit alleging Uber swiped its trade secrets, and as the October court date approaches, the phalanxes of high-powered attorneys on each side are maneuvering into battle formation.

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On one side, Uber Technologies, Inc. has fired Anthony Levandowski, the star engineer at the center of the lawsuit, saying he refused to cooperate with its legal team and giving him a good look at the underside of the proverbial bus. The ride-hailing giant will argue that if Levandowski did steal trade secrets, it had nothing to do with Uber, and that the company saw no benefit from his theft.

At the same time, its counsel will seek to shield some of Levandowski’s potentially damaging documentation from the court, using attorney-client privilege and the engineer’s decision to assert his Fifth Amendment right against self-incrimination. Meanwhile, Uber reportedly told investors it might reach a settlement agreement with Waymo—a reminder that this case still might not end up in court. (Waymo says it believes it has everything it needs to win in court now.)

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Across the battlefield, Alphabet-owned Waymo is hellbent on getting its hands on all the evidence it can in a quest to link the trade secret theft to Uber higher-ups, maybe even ex-CEO Travis Kalanick himself. It wants to show, definitively, that Uber used its ideas. But absent a smoking gun, Waymo will attempt to weave together a series of not-so-pretty facts—that Levandowski has asserted his Fifth Amendment right, and that Uber knew about the swiped info before it acquired a company founded by Levandowski—into a narrative that culminates with Uber knowingly stealing self-driving tech. Waymo has also dropped three of its four patent claims, narrowing its arguments and focusing on its best bet for a knockout punch.

The Background

Quickly, the bones of the case: In January 2016, Levandowski departed his job at Google's self-driving unit (which has since launched as Waymo, a standalone company under the Alphabet umbrella) and founded self-driving truck startup Otto. After a few months of informally consulting with Uber, the company hired him and acquired Otto, in August 2016, for a reported $680 million. (Uber denies that figure in recent legal filings.) By the fall, Waymo says it suspected foul play. The company looked back through its system and allegedly discovered that Levandowski had downloaded 14,000 confidential files before leaving Google. Waymo says the documents contained the technical details of its proprietary lidar system, the laser technology that helps self-driving cars perceive obstacles and navigate.

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The Alleged Theft

Waymo seems to have strong evidence that Levandowski really did download those files, at least in the eyes of the judge overseeing the case. "You have one of the strongest records I’ve seen for a long time of anybody doing something that bad,” Judge William Alsup of the Northern District of California told Waymo lawyers during a hearing in May. "Good for you.”

In May, Alsup took the dramatic and unusual step of referring the trade secrets case to federal prosecutors, which means Levandowski could be under criminal investigation. “For a judge to do that, he must believe there’s a lot of smoke, if not fire, for criminal violations,” Peter Toren, an intellectual property lawyer and former Department of Justice attorney, told WIRED at the time.

Uber, however, is prepared to argue that the alleged downloads were never even meant to boost its self-driving car project. “Uber believes that the downloading was done in relation to Levandowski’s employment at Google, specifically to ensure the expected payment of Levandowski’s $120 million bonus from Google,” lawyers with the firm Morrison & Foerster write in recent filings. They’ll argue that this is part of an internal labor dispute, and that even if Levandowski did it, he was out for himself—not Uber. (A Waymo spokesperson says this theory does not line up with Levandowski's Google bonus schedule.)

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Meanwhile, Waymo has narrowed the purview of the case, at the strong urging of Judge Alsup. (The judge has complained bitterly about pawing through more than 800 filings for this case. That is a lot.) Waymo will now pursue just one of its original four patent claims against Uber. Don’t read too much into this, legal experts say: Lawsuits tend to shed claims as they get closer to their trial dates.

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Silence of the Levandowski

In March, Levandowski chose to assert his Fifth Amendment right against self-incrimination, which effectively shielded a whole bunch of information from Waymo’s team. He won't answer specific questions about his actions, and he won’t turn over documents related to case—or even confirm those documents’ existence. Uber has also argued that records of communication between Levandowski and his lawyer from when Uber was acquiring Otto fall under attorney-client privilege, and are not fair game for this trial. While it’s unclear whether Alsup will allow a jury to draw any kind of negative inferences from Levandowski’s absence (there’s some precedent for that in civil cases), Levandowski’s choice hasn’t exactly helped Uber. Uber is clearly worried: It notes in a court filing that Waymo shouldn’t be able to use Levandwoski’s pleading the Fifth as “highly prejudicial evidence at trial.”

Now, the Fifth Amendment won't let Levandowski avoid this Uber-Waymo dispute altogether. The court ruled in the spring that the principle won’t shield Uber from, say, submitting a detailed accounting of how the Otto acquisition went down. But it will keep some stuff in the shadows, at least for now.

Due Diligence

Uber will also try to prove that, contrary to Waymo’s claims, it did a bang-up job ensuring Google trade secrets didn’t make their way into its self-driving tech. The fight here will focus on a due diligence report, Uber’s detailed accounting of its security steps during the Otto acquisition process, when trade secrets might have slipped into the Uber bloodstream. The court has ruled that Uber must turn this report over to Waymo for examination, but it has also said that Levandowski does not have to provide some information related to the acquisition that might incriminate him. (Thanks, Constitution!) Uber’s legal team is also working to ensure that even if that due diligence process did uncover stolen documents, it won't be held accountable for anything that didn't end up on its own servers.

Waymo wants all of the paperwork as part of a bid to pin down Uber on its timeline, then compare it to a paper trail or document access records. That way, lawyers will be able to make an argument about what Uber knew, and when it knew it. “The timelines become very important because certain activities take on a more nefarious air when they’re contrasted with the fact that someone is interviewing that day or has a meeting,” says John Marsh, a trade secrets litigator with the law firm Bailey Cavalieri.

What Uber Knew

The filings show that Uber did know something about those Google downloads. In early 2016, well before Uber officially acquired Otto in August, Uber lawyers say Levandowski told Otto cofounder Lior Ron that “he had found five discs in his home that contained Google information.” When Ron asked if Levandowski had used the info on the discs to help Otto’s systems, Levandowski said no. He also told Uber execs—including Travis Kalanick—about the discs. “Kalanick emphatically told Levandowski that Uber did not want any such information, that Levandowski should not bring any such information to Uber, and to talk to his lawyer,” Uber lawyers report.

That, theoretically, dealt with the issue. But there’s another wrinkle: Uber then proceeded to indemnify Levandowski against “bad acts,” meaning the company pledged to cover his butt should he get in legal trouble. That’s unusual, legal experts say. Waymo could use that detail to bolster its case that Uber was in on the theft, and was ready to support Levandowski should it come out.

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"When you bring somebody aboard to head up a new group and you've found something pretty serious, you may say, ‘Don’t bring it, discard it, we don’t want anything to do with it,’” says Marsh. “To indemnify them, it sends the exact opposite message: ‘If something bad happens, I’ll protect you.'"

Of course, this is all circumstantial. But it doesn’t look good, and looks may matter. Let the lawyerly battles continue.